Chinese Ambassador Deng Boqing presents his credentials to President Goodluck Jonathan in November 2010.

by Oloruntobi “IBK” Jaiyeola

The ties between Nigeria and the People’s Republic of China were strengthened this month with China offering Nigeria a $1.1 billion loan for transportation and communication system improvements. A press release from the office of Nigeria’s Ministry of Finance states that the 20-year, 2.5 percent interest loan for the projects provides a grace period of seven years before payment is required.

Today, China is Africa’s largest trading partner, surpassing the United States and its traditional European partners. Yet some people have questions and remain wary of China’s economic interest. What does Nigeria stand to gain with this partnership and how will its government ensure that it reaps the benefits? How will the trade relations affect Nigeria’s economy with importations from China exceeding local production? Will jobs be given to Nigerians or outsourced to Chinese workers?

This new partnership is met with mixed feelings by some Nigerians based on the country’s history of corrupt and manipulative governments. Not much information has been released by the Nigerian media about the terms of this loan or the implications for the oil-rich Nigeria. Also, some of the Western media coverage of Sino-Nigerian relations has been skeptical about China’s intentions in Africa.
The future of this alliance remains uncertain and although Chinese workers have started work on some projects in Nigeria, like the moribund railroad system, there is no guarantee of completion based on previous failures. In 2006, Nigeria’s former president, Olusegun Obasanjo, signed an $8 billion deal with the Chinese to repair the nation’s railroads, with no visible effect.

Other engagements between the two countries include a bilateral education agreement, which Nigeria also holds with 20 other countries including Russia, Cuba, Japan, Morocco, Turkey, Ukraine, Serbia, Romania and Algeria, its most active participants. The education agreement is a scholarship program, in collaboration with some Non-English speaking countries, which covers both undergraduate and postgraduate study programs in any of the partner countries.

For now it remains uncertain what this new loan agreement between the two countries will bring. Will the relationship be a dependent one with Nigeria becoming overly reliant on Chinese investments? Or will Nigeria be able to transform itself from a resource-based economy to a manufacturing one? Time will tell.

(Image from the Embassy of the People’s Republic of China located on the website of the Federal Republic of Nigeria.)